We do not expect the price to fall much further, if at all, and a resumption of the rally is imminent in our view. Today's price action is suggestive of a bottom, however it is early in the trading day.
Gold needs to reclaim the 200 DMA quickly and move back towards the 50 DMA before it starts to curl over if the bullish case is to remain valid - we expect gold will close this week above 1300.
Equities remain strong, diverting funds back out of the metals, oil is well above $100 a barrel and the dollar is holding above 80 - we would like to see the dollar begin to fall back again in conjunction with a gold rally.
Support can be found at 1277-1280, 1250-1255, 1237-1240, 1220-1225, 1210, 1200 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term, though this now
looks unlikely unless we break below 1250.
Resistance can be found at 1286-1288, 1298-1300, 1307, 1318-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. The impulsive breakout above the down trend line on the weekly chart suggests an end to the intermediate term down trend and that a significant rally is now developing.
Today's video for subscribers looks at the recent trading in more detail and our thoughts on gold for the coming week.